Reason Magazine
- reason.com
- reason.tv
- reason.org
- Donate
- Site Search:
Reason on Facebook
Reason on Twitter
Reason on YouTube
Reason RSSGet Reason E-mail Updates!
Manage your Reason e-mail list subscriptionsadvertisements
Don't Clog. Be Clean. Get Screwed.
To paraphase Hank Williams Jr., winner of a coveted Institute for Football Preparedness Award, are you ready for the sort of full-throttled hosing given to Charlton Heston in Planet of the Apes?
When it comes to cataclysmic economic-bailout action, the important thing, says Sen. Christopher Dodd (D-Conn.) is to act quickly, and not to "clog it up." Treasury Secretary Hank Paulson, about the least-inspiring public figure since Mike Dukakis climbed into a tank or former FEMA jefe Mike Brown left horses behind, channels Gov. Eliot Spitzer in a hotel room and says: "We want this to be clean, and we want it to be quick." And Sen. Richard Shelby (R-Ala.), ranking member of the Senate banking committee, says "As a Republican I'm not a taxer, but when we add a trillion dollars to the deficit, sooner or later there will have to be a reckoning."
Bad stuff to come; expect it all to be overwrought, misdirected, and absolutely ineffective in preventing future episodes. That $1 trillion figure, by the way, is the new number, based on $700 billion to the financial-market players plus several billion more in a stimulus package (read: future taxes) to regular joes such as you and me.
The one thing you can definitely expect not to see: Any sort of official discussion of how the massive regulations already in place either did nothing to circumvent the problems or to increase them.
And to the extent that any or all or most or some of this has to do with Fannie Mae and Freddie Mac (as Dodd holds), the feds would have done well to heed the pro-privatization advice of Reason Foundation analyst Robert W. Poole Jr. back in 1995.
|9.22.08 @ 9:02AM|#
channels Gov. Eliot Spitzer in a hotel room and says: "We
want this to be clean, and we want it to be quick."
He forgot to mention that he wants to do it without protection,
too. But unlike Miss Dupree, we don't get to require protection.
Bend over and spread 'em!
kinnath|9.22.08 @ 9:12AM|#
We're going to bail out foreign banks also. Made my day when I read that yesterday.
|9.22.08 @ 9:21AM|#
$700 billion seems like a lot of money, but the alternative is that Jewish bankers riot and burn our cities to the ground. This is the price of social peace.
|9.22.08 @ 9:25AM|#
The one thing you can definitely expect not to see: Any sort of official discussion of how the massive regulations already in place either did nothing to circumvent the problems or to increase them.
But they weren't the right regulations, being implemented
by the right people. This time it will be entirely
different.
|9.22.08 @ 9:30AM|#
"We want this to be clean, and we want it to be
quick."
Just cut everybody a check for $1,000,000.00 Then we'll all be
rich!
|9.22.08 @ 9:40AM|#
1. Deregulate industry.
2. Watch industry collapse.
3. Blame regulation.
4. Look down nose at those who oppose deregulation. Ideally, while
spouting cliche.
Jerry|9.22.08 @ 9:40AM|#
Why would you need $700 billion when the US Treasury already owns these assets through Freddie & Fannie? It's like being simultaneously buyer, seller and auctioneer at an auction.
Sausage Swingin\' Libber|9.22.08 @ 9:41AM|#
His name is Henry Paulson ... his name is Henry Paulson ... his name is Henry Paulson ...
|9.22.08 @ 9:48AM|#
Hey, did you guys know that the banking, insurance, and housing industries have been completely deregulated for years now? Not one rule or regulation on the books. I mean, no federal interference in those markets whatsoever.
Nigel Watt|9.22.08 @ 9:53AM|#
SugarFree, wow! I guess we should let the brilliant folks in Washington run our economy from now on.
|9.22.08 @ 9:54AM|#
LOL, you have to be kidding me. Seems to me the Regime should
hand out bottles of Vaseline to all the sheeple!
Jiff
http://www.Privacy-Center.net
|9.22.08 @ 10:01AM|#
Hey, guys, did you know that having any regulation at all on any
aspect of the financial sector means that there hasn't been any
deregulation?
It's true! If you can find a single page of regulation that has to
do with financial transactions, that means deregulation never took
place in any aspect of that industry.
|9.22.08 @ 10:02AM|#
It's that damn free market screwing over the little gu.... oh, you mean the big guys got screwed? Sorry, that does not fit into my worldview.
|9.22.08 @ 10:06AM|#
I wonder what the Democrat/Republican/Libertarian breakdown of people who have sub-prime, no down payment mortgages in foreclosure looks like.
|9.22.08 @ 10:07AM|#
Looks like a good time to put your retirement into straw
futures.
Especially since you have the specious bullshit market completely
cornered.
|9.22.08 @ 10:12AM|#
massive regulations already in place
This, right here, sums up the problem so many libertarians have
getting their heads around what's going on.
They look at regulation as being like flour in a cake recipe, where
the only questions are: Do you use flour? And how much?
Regulation was "massive?" Um, ok. Was it the right type of
regulation? Did it cover the relevant areas? Was there regulation
in place to deal with the class of actions that led to the
meltdown?
If you don't think its important to answer these questions before
proclaiming that regulation failed to stop the problem, you're
treating it like some kind of magical fairy dust.
libertarian democrat|9.22.08 @ 10:17AM|#
SLD, I think regulation is bad, in and of itself. Although if it
works okay, I can put up with some while focusing on more pressing
issues, but it's on the list to get rid of eventually.
That said, I agree with Joe's point about how regulation is often
addressed. Some types are certainly worse than others. Type does
matter more than quantity.
libertarian democrat|9.22.08 @ 10:20AM|#
I think some regulation can have arguably overall positive
effects overall utility (not counting liberty). It doesn't make it
a good thing, just a less bad thing than regulations that have
hugely negative effects on overall utility (and liberty).
We've had a bit of both, but I still think alot of the interference
is to blame. Me and Joe do not see eye to eye on that.
The_Chef|9.22.08 @ 10:25AM|#
joe have you ever worked in the banking industry?
I have, and let me tell you the Federal laws that have been drilled
into the banking and investment industries is amazingly complex.
You should look at the federal requirements for a brokerage
license.
There is a great bit done here by Tyler Cowen of Marginal
Revolution on how increased regulation creates more complex
investments.
Marginal Revolution
|9.22.08 @ 10:29AM|#
The Chef,
Ah, so there are FOUR cups of flour? Wait, FIVE? Well, all right,
then.
ChrisH,
Pleae feel free to point out where I have provided specifics about
what regulations should look like.
Unlike you, I don't believe that my political philosophy is a
replacement for specialized knowledge in dictating policy.
|9.22.08 @ 10:31AM|#
let's see...given that "deregulation" actually involved "making
risk public and reward private", much akin to the S&L crisis,
some us get our hackles up that you want to blame it on
"deregulation", joe. Because while strictly factually accurate,
you're deliberately missing the entire point.
Which is pretty annoying.
|9.22.08 @ 10:42AM|#
Pehaps, TAO, your "entire point" isn't actually, you know, the
entire point.
But since you can see that the deregulation that has happened
wasn't actually a return to some idyllic free-market condition, but
was actually gaming the system, might it be possible to take the
next step, and acknowledge that judging regulatory policy merely by
whether it adds to or subtracts from the number of rules companies
have to follow isn't terribly helpful in understanding what's
happened?
The_Chef|9.22.08 @ 10:51AM|#
No Joe, because complete deregulation prevents gaming the
system.
Laws against fraud and theft, coupled with a disclosure clause are
all you need.
|9.22.08 @ 10:52AM|#
uh, yes. That seems like a fundamental, joe.
Like I said, most people are irritated that you're blaming this on
deregulation, when in fact most of acknowledge your very limited
and pedantic point and want to go beyond that.
Seriously, what are you getting at with this? Do you really feel
you're accomplishing anything?
short, fat bastard|9.22.08 @ 10:56AM|#
But since you can see that the deregulation that has
happened wasn't actually a return to some idyllic free-market
condition, but was actually gaming the system, . .
.
Ooh, copyright infringement.
|9.22.08 @ 11:02AM|#
But since you can see that the deregulation that has
happened wasn't actually a return to some idyllic free-market
condition, but was actually gaming the system
joe
By blaming how the most recent "deregulation" was actually a set of
regulations set up to game the system, I'd think you would be in
the same boat with us complaining about how the regulations in
place were largely to blame for the failure.
short, fat bastard|9.22.08 @ 11:11AM|#
short, fat bastard | September 22, 2008, 10:30am | #
joe I respectfully disagree with you statement that any type of
deregulation has occurred within the last decade.
The Clinton and Bush adminstrations have been playing three card
monte with the financial markets since the early nineties. Some
rules may have been eliminated, but they were replaced with other
rules.
Nothing has been accomplished other to distort the market in favor
of short-term investors while destroying long-term investors.
That's not deregulation, that's gaming the system.
I posted this in the other thread 10 minutes before joe used the
phrase gaming the system.
I'm sure is a radom coincidence.
Don the libertarian Democrat|9.22.08 @ 11:19AM|#
Please don't give up. There's massive resistance to this Paulson Plan on the liberal and libertarian blogs. Great column however.
|9.22.08 @ 11:22AM|#
We need to erect an opaque curtain behind which our saviours can
work their miracles undisturbed.
That is what this is all about; it's why there can be no judicial
review of the process, and no "confusion" about who is in
charge.
|9.22.08 @ 11:26AM|#
Here's a tip for you- a pop-up which locks up my computer is not an effective appeal.
|9.22.08 @ 11:51AM|#
But they weren't the right regulations, being implemented by
the right people. This time it will be entirely
different.
Oh no! joe's taken over Sugar Free's mind.
Mad Max|9.22.08 @ 11:52AM|#
"*jumps off bridge*"
Not off *my* bridge, you don't. I have to clean that stuff up.
|9.22.08 @ 11:57AM|#
1. Deregulate industry.
2. Watch industry collapse.
3. Blame regulation.
4. Look down nose at those who oppose deregulation. Ideally, while
spouting cliche.
Hdey joe,
Since you know so much about about MBSs and derivatives, how many
pages of regulation were still applicable to those two financial
instrumentrs as of last week?
A) Jus one or two?
B) Measured in hundreds of pounds?
Enlighten me. No linkee, no believee.
Sausage Swingin\' Libber|9.22.08 @ 12:17PM|#
His name is Romeo Crennel, his name is Romeo Crennel, his name
is Romeo Crennel . . .
*jumps*
s
p
l
a
t
!!!
Big Guy|9.22.08 @ 12:27PM|#
oh, you mean the big guys got screwed?
Yeah, I had to trade my Rolls in for a Lexus.
Warty|9.22.08 @ 12:34PM|#
His name is Romeo Crennel, his name is Romeo Crennel, his
name is Romeo Crennel
In death, he has a name!
|9.22.08 @ 1:05PM|#
You know that lost decade in Japan? Well, get ready for two here (what's that called - a score?)
perilisk|9.22.08 @ 1:34PM|#
"They look at regulation as being like flour in a cake recipe,
where the only questions are: Do you use flour? And how
much?"
Oh, I thought libertarians were the ones making fun of people
saying "We have do something. Anything is better than nothing." Not
that I disagree with the point that all regulations are not created
equal.
Warty|9.22.08 @ 1:56PM|#
In all seriousness, I'm kind of relieved that the Browns are
back to normal. This way, I don't have to waste my time with
them.
(I say that, but I know I'll still watch every game, because I'm an
idiot)
Sausage Swingin\' Libber|9.22.08 @ 2:03PM|#
Warty . . . I feel your pain. But as a Browns fan, this is what I am accustomed to. We are all masochists . . . but, let the bloodletting begin! Bye-bye Anderson, hello Mighty Quinn.
unhillbilly|9.22.08 @ 2:51PM|#
Does anyone else bject to this sentence in the proposed
legislation:
"Decisions by the Secretary pursuant to the authority of this Act
are non-reviewable and committed to agency discretion, and may not
be reviewed by any court of law or any administrative agency."
|9.22.08 @ 3:12PM|#
Reinmoose,
By blaming how the most recent "deregulation" was actually a
set of regulations set up to game the system, I'd think you would
be in the same boat with us complaining about how the regulations
in place were largely to blame for the failure.
This ignores the point that prior to this deregulation mania, this
cascading serious of collpases didn't happen, and couldn't
happen.
It really doesn't matter if that deregulation wasn't "True
Deregulation." It's the deregulation we got. Which makes it not so
much "pendantic" as "accurate" to say that deregulation (not some
Rainbow Puppy Island policy, but the actual deregulation that
existed in this reality) and not merely "regulation" in some
obscure, generic sense, is a major cause of this collapse.
The line seems to be, "Gee, weak regulations helped cause this
mess. I know, let's weaken them some more!"
That sounds a little too much like the people wdho tell me that the
problems in the Soviet Union stem from the fact that it wasn't
"TRUE COMMUNISM," meaning some variety that hasn't ever even come
close to existing in reality. So I'll pass.
short, fat bastard|9.22.08 @ 3:30PM|#
joe, I really wish you would stop calling what happened in the
past "deregulation".
What happened is that our elected representatives rewrote the
regulations to benefit some chosen class of citizens while
frequently burying everyone else on a new set of burdens.
The fact that these officials lie and call this process
"deregulation" doesn't mean we should perpetuate this fraud.
|9.22.08 @ 3:46PM|#
The term "deregulation" is not defined as bringing the
regulatory state in line with some uber-libertarian vision of the
ideal state.
It's defined as removing or reducing regulations - and that's
exactly what financial industry deregulation did.
The fact is, rewriting regulations game the system and reducing the
regulatory burden on "innovative practices" can be exactly the same
thing.
|9.22.08 @ 4:33PM|#
It's defined as removing or reducing regulations - and
that's exactly what financial industry deregulation did.
Some regulations were lifted, granted. Others were put in place (go
ahead, try to deny it). To say that the financial industry is less
regulated now than it was ten or fifteen years ago is, I think,
flat wrong.
Not to mention that, as far as I can tell, the major regulations
that were lifted were, for the most part, irrelevant to the
liquidity crisis. The big ones, it seems to me, are the allowance
for "mark-to-market" and the reduction in capitalization
requirements, but my banking/securities law experience is fifteen
years out of date.
MJ|9.23.08 @ 7:30AM|#
P Brooks,
The team that currently resides in Baltimore were never the Browns.
They are an expension team that came into being while the Cleveland
frnchise went on hiatus. That's the NFL's story, and you will stick
to it. The fact that they had the same owner and players as the
pre-hiatus Browns means nothing.
Site comments/questions:
Media Inquiries and Reprint Permissions:
(310) 367-6109
Editorial & Production Offices:
3415 S. Sepulveda Blvd.
Suite 400
Los Angeles, CA 90034
(310) 391-2245